Economic Systems Analysis and Assessment: Intensive Systems, Organizations, and Enterprises

Economic Systems Analysis and Assessment: Intensive Systems, Organizations, and Enterprises

by Andrew P. Sage, William B. Rouse
Released May 2011
Publisher(s): Wiley-Interscience
ISBN: 9780470137956

Read it now on the O’Reilly learning platform with a 10-day free trial.

O’Reilly members get unlimited access to books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.

Start your free trial

Book description

An Authoritative Introduction to a Major Subject in Systems Engineering and Management

This important volume fills the need for a textbook on the fundamentals of economic systems analysis and assessment, illustrating their vital role in systems engineering and systems management. Providing extensive coverage on key topics, it assumes no prior background in mathematics or economics in order to comprehend the material.

The book is comprised of five major parts:

  • Microeconomics: a concise overview that covers production and the theory of the firm; theory of the consumer; market equilibria and market imperfections; and normative or welfare economics, including imperfect competition effects and consumer and producer surplus

  • Program Management Economics: discusses economic valuation of programs and projects, including investment rates of return; cost-benefit and cost-effectiveness analysis; earned value management; cost structures and estimation of program costs and schedules; strategic and tactical pricing issues; and capital investment and options

  • Cost Estimation: reviews cost-estimation technologies involving precedented and unprecedented development, commercial-off-the-shelf (COTS) software, software reuse, application generators, and fourth-generation languages

  • Strategic Investments in an Uncertain World: addresses alternative methods for valuation of firms including Stern Stewart's EVA, Holt's CFROI, and various competing methodologies

  • Contemporary Perspectives: covers ongoing extensions to theory and practice that enable satisfactory treatment of the increasing returns to scale, network effects, and path-dependent issues generally associated with contemporary ultra-large-scale telecommunications and information networks

Also discussed in this comprehensive text are normative or welfare economics and behavioral economics; COCOMO I and II and COSYSMO as examples of a cost model; and options-based valuation models and valuation of information technology intensive enterprises.

Economic Systems Analysis and Assessment serves as an ideal textbook for senior undergraduate and first-year graduate courses in economic systems analysis and assessment, as well as a valuable reference for engineers and managers involved with information technology intensive systems, professional economists, cost analysts, investment evaluators, and systems engineers.

Table of contents

  1. Cover
  2. Contents
  3. Title
  4. Copyright
  5. Preface
  6. Chapter 1 : Introduction to Economic Systems Analysis and Assessment: Cost, Value, and Competition in Information and Knowledge Intensive Systems, Organizations, and Enterprises
    1. 1.1 Introduction
    2. 1.2 A Framework for Systems Engineering and Management
    3. 1.3 Theory of the Firm
    4. 1.4 Theory of the Consumer
    5. 1.5 The Interaction of the Theories of Firms and Consumers: Microeconomic Models of Economic Activity
    6. 1.6 Welfare or Normative Economics
    7. 1.7 Program and Project Management Economics
    8. 1.8 Contemporary Issues Concerning Information and Information Technology Economics
    9. 1.9 Economic Pitfalls in the Engineering of Systems
    10. 1.10 Summary
  7. Chapter 2 : Production and the Theory of the Firm
    1. 2.1 Introduction
    2. 2.2 The Production Function
    3. 2.3 Multiproduct Firms and Multiproduct Production Functions
    4. 2.4 Classic Theory of the Firm
    5. 2.5 Imperfect Competition
    6. 2.6 Summary
  8. Chapter 3 : The Theory of the Consumer
    1. 3.1 Introduction
    2. 3.2 Economic Utility Theory and Its Axioms
    3. 3.3 Properties of Utility Functions
    4. 3.4 The Fundamental Problem of the Consumer
    5. 3.5 Sensitivity and Substitution Effects
    6. 3.6 Summary
  9. Chapter 4 : Supply–Demand Equilibria and Microeconomic Systems Analysis and Assessment Models
    1. 4.1 Introduction
    2. 4.2 Basic Supply–Demand Equilibrium for a Single Good
    3. 4.3 General Supply–Demand Equilibrium Conditions
    4. 4.4 Extensions to General Equilibrium to Include Market Interdependencies
    5. 4.5 Microeconomic Models
    6. 4.6 Summary
  10. Chapter 5 : Normative or Welfare Economics, Decisions and Games, and Behavioral Economics
    1. 5.1 Introduction
    2. 5.2 Pareto Optimality under Perfect Competition Conditions
    3. 5.3 External Effects and Imperfect Competition: Public Goods
    4. 5.4 External Effects and Imperfect Competition: Nonindependent Production and Consumption
    5. 5.5 Welfare Maximization and Social Choice
    6. 5.6 Summary
  11. Chapter 6 : Cost–Benefit and Cost–Effectiveness Analyses and Assessments
    1. 6.1 Introduction
    2. 6.2 The Time Value of Money
    3. 6.3 Identification of Costs and Benefits
    4. 6.4 The Identification and Quantification of Effectiveness
    5. 6.5 Summary
  12. Chapter 7 : Cost Assessment
    1. 7.1 Model-Based Parameters for Productivity
    2. 7.2 Early Models for Estimation of Costs, Including Effort and Schedule
    3. 7.3 The Constructive Cost Model
    4. 7.4 Summary
  13. Chapter 8 : Approaches to Investment Valuation
    1. 8.1 Microeconomics
    2. 8.2 The Investment Problem
    3. 8.3 Investment Valuation
    4. 8.4 Summary
  14. Chapter 9 : Real Options for Investment Valuation
    1. 9.1 Nature of Options
    2. 9.2 Option Pricing Theory
    3. 9.3 Option Calculator
    4. 9.4 Strategic Metrics
    5. 9.5 Investment Decision Making
    6. 9.6 Value-Centered R&D
    7. 9.7 Summary
  15. Chapter 10 : Contemporary Perspectives
    1. 10.1 Introduction
    2. 10.2 Evolutionary Economics
    3. 10.3 Path Dependence and Network Effects
    4. 10.4 Intellectual Capital
    5. 10.5 Value of Information
    6. 10.6 Investing in Humans
    7. 10.7 Summary
  16. Index

Product information

  • Title: Economic Systems Analysis and Assessment: Intensive Systems, Organizations, and Enterprises
  • Author(s): Andrew P. Sage, William B. Rouse
  • Release date: May 2011
  • Publisher(s): Wiley-Interscience
  • ISBN: 9780470137956